lava
@lava-xyz
Hello, Farcaster! Allow us to introduce ourselves. At Lava, we’ve built the most secure way to borrow against your bitcoin. No counterparties, no custodians, no bridges. Instead, we’ve built a fully on-chain lending protocol that leverages Discreet Log Contracts (DLCs), which are smart contracts that are native to bitcoin. Using Lava, you can take out a USD loan using your bitcoin as collateral without giving up self-custody. It’s fast, secure, and we offer some of the best rates in the business. You can check us out at www.lava.xyz to learn more! Feel free to message us if you’ve got any questions. We’re excited to be here!
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Kat 🔥
@katwolfie.eth
1. Who is providing the liquidity in U.S. dollars? 2. What happens if BTC crashes? 3. What are you doing with the BTC that ppl are lending? 4. What legal framework is in place to protect ppl from losing funds in the event your company collapses?
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lava
@lava-xyz
1. We partner with large liquidity providers to supply on the lending side. 2. Our loans initiate at 50% LTV. If BTC crashes, users can add more collateral or pay off part of their loan at any time. If the LTV reaches a pre-defined ratio, the BTC gets released from the contract to the lender to liquidate. 3. We don't do anything with it because we don't have access to it! The user never gives up their BTC to a custodian. It goes into a contract on the Bitcoin L1, and the user can verify that on-chain at any time. Rehypothecation is impossible. 4. Because this product is built on self-custody and the loans are done via discreet log contracts, the user always has access to their funds. Appreciate the questions! Happy to answer more!
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Kat 🔥
@katwolfie.eth
Thank you for clarifying!
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